Is The ‘Crouching Tiger 2’ Dispute A Brilliant PR Gambit For Netflix?

That’s Janney Capital Markets’ Tony Wible’s take in a shrewd report this morning about the controversy. The four leading theater chains said yesterday that they won’t showCrouching Tiger, Hidden Dragon: The Green Legend on their IMAX screens when it premieres in August: The film will also be immediately available on Netflix, and theaters want to maintain their exclusive access to major new films. That’s great for Netflix. It “will get hype for a relatively low cost via a film that will largely only be seen online in the U.S.,” the analyst says. He adds that the press “will focus on this move to ‘disrupt,’ which could generate free publicity that marginally boosts subs.”

The streaming video company probably will only pay about $10M, Wible figures, for the sequel to a Ang Lee-directed 2000 martial arts epic. The original cost $17M to make, and the sequel is a co-production with The Weinstein Co. If Wible’s assumptions are correct, then Crouching Tiger 2 would come in far below Netflix’s outlay for each DreamWorks Animation film offered nine months after it hits the theaters — for prices estimated at anywhere from $20M to $40M. It also spent $100M for two 13-episode seasons of House Of Cards.

Even if the Netflix initiative is a bust with U.S. exhibition chains, it could pay off overseas. “Studios may welcome another bidder for theatrical distribution rights in these countries, which would allow [Netflix] to get early access to exclusive content in new markets without having to wait until the typical pay TV window,” Wible says.